Re:STPI
kiran np
Devanshu Rawat
May be this will help you:-
PROCEDURE FOR DOMESTIC TARIFF AREA (DTA) ENTITLMENT PERMISSION
STP units are permitted to sell 50% of the exports of the preceding years (3 years) to DTA (Domestic Tariff Area) unit. Such supply shall, however, be subjected to the achievement of Export Obligation/ Minimum Export Performance.
For software units, sale in the DTA is permissible in any mode including online data communication.
Procedure to apply for DTA Sale entitlement permission :
(a) Application as per the standard format along with details .
(b) Purchase order /Agreement copy of the contractor.
Regards,
Diwesh Rawat
Date: Tue, 24 Feb 2009 10:24:22 +0530
Subject: [CSMysore] Re:STPI
From: adith...@gmail.com
To: csmy...@googlegroups.com
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anantha...@wipro.com
Dear Kiran,
You can go through this. Also enclosed a Ready reconair which may be useful to you get through entire STPI policy references.
DTA sale entitlement under paragraph 6.8(a) of Foreign Trade Policy
Paragraph 6.8(a) of FTP read with paragraph 6.14 of HBOP provides for DTA sale by EOU/EHTP/STP unit. The guidelines are contained in the Appendix 14-IH of the Handbook of Procedures, Vol. I. The units can avail DTA sale on quarterly/half yearly/annual basis and DTA sale entitlement shall be availed of within three years of the accrual of entitlement. The application as per Annexure II to Appendix 14-IH shall be submitted to the Development Commissioner concerned certified by an independent Cost/Chartered/Cost & Works Accountant and endorsed by bond officer of Customs/Central Excise having jurisdiction over the unit. DTA sale shall be availed by the unit on the basis of authorization issued by Development Commissioner.
The DTA sale entitlement (sale of goods in DTA on payment of concessional duty) in case of Units other than Gems and Jewellery units is limited to 50% of the FOB value of export subject to fulfillment of positive NFE. The DTA sale of instant tea is allowed upto 20% FOB value of export in the form of Tea bags or Bulk. No DTA sale entitlement is permissible in case of motor cars, alcoholic liquors, tea (except instant tea) pepper & pepper products, packaging/labelling/segre-gation/refrigeration unit/compacting/micronisation/pulverisation/ gra-nulation/conversion of monohydrate form of chemical to anhydrous form or vice-versa. In case of unit set up for repair, re-conditioning, or reengineering, no DTA sale entitlement accrues to the unit and DTA sale is not allowed. All DTA sale entitlement accrues only when unit has achieved positive NFE cumulatively on the basis of FOB value of exports. The words “FOB value of exports” refers to physical exports only. Therefore, the value of deemed exports made by the unit is not considered while determining the FOB value of exports. However, the sales made to private bonded warehouses set up under paragraph 2.39 of the Foreign Trade Policy are taken into account for the limited purpose of arriving at FOB value of exports by EOU units provided payment for such sales are made from EEFC accounts. Such supplies are covered under notification No. 46/2001-Central Excise (NT), dated 26.6.2001 and are subject to conditions, procedures, class of exporters specified under CBEC Circular No. 581/18/2001-CX, dated 29.6.2001 as amended.
The EOUs are allowed the facility of Advance DTA sale for the purposes of trial production of the goods. The permission in this regard is given by the Development Commissioner. The value of such advance DTA is limited to entitlement accruable on the exports envisaged in the first year of operation of the unit. This advance DTA sale permitted to the unit is adjusted against the subsequent DTA sale entitlements within a period of two years, however, drugs and pharmaceutical units can make advance DTA sale of the production on the exports envisaged in the first two years, adjustable against subsequent entitlement within a maximum period of three years from the date of commencement of production by the unit. Advance DTA sale is also available in case of capacity expansion/product diversification. In such cases, the unit is entitled to advance DTA sale linked to the exports envisaged from the expansion or new production stream or through product diversification. No advance DTA sale is admissible to the DTA unit converted into EOU except in respect of new production stream as a result of change of technology.
As advance DTA sales made by the unit are on payment of concessional rate of duty, there may be cases where after availing of advance DTA sale, the unit is not able to earn DTA sale entitlement subsequently. In such a situation, the differential duty has to be recovered from such units. Advance DTA sale is not covered under B-17 Bond, and therefore, separate bond has to be required to be executed with the Assistant Commissioner/Deputy Commissioner (Customs/ Central Excise) to cover the difference between the duty paid on advance DTA sale and the full duties applicable on such goods.
Valuation of Goods sold in DTA
Section 3 of the Central Excise Act, 1944 provides that the valuation of goods manufactured in the EOU and cleared into DTA is to be done in accordance with the provisions of the Customs law. Thus, when the invoice price of the goods under-assessment is in the nature of transaction value, such invoice value can be accepted. (Circular No. 23/84-CX-6 dated 29-5-84 and Instructions issued vide File No. 268/35/92-CX-8 dated 17-8-94 and Circular No. 330/46/97-CX dated 20-8-97).
Duty to be paid on DTA sale made under paragraph 6.8(a) of Foreign Trade Policy
On fulfillment of positive NFE (Net Foreign Exchange Earnings) the EOUs other than gem and jewellery units, are allowed to sell goods including rejects (upto 5% of FOB value of exports), waste, scrap, by-products and services in DTA upto 50% of FOB value of exports at a concessional rate of duty. The concessional rate of duty is charged in an amount equal to 25% of basic Customs duty and 100% additional duty of customs under section 3 of Customs Tariff Act. Any other duty of customs under any other law for time being inforce shall be taken into account unless specifically exempt. Whereas the clearance of finished goods in DTA upto 50% of FOB is on payment of concessional rate of duty subject to the condition of achievement of positive NFE, sales in DTA beyond 50% attract full duties. (Reference : Notification No. 23/2003-CE, dated 31-3-2003 as amended by Notification No. 22/06-CE dated 1-3-2006).
Where the finished goods, by-products, rejects, waste, scrap, remnants are manufactured or produced wholly out of indigenous raw material, the same is allowed to be sold in DTA within the DTA sale entitlement under paragraph 6.8(a) of Foreign trade Policy, subject to fulfillment of positive NFE (clearance of waste/scrap/remnants on payment of full duty are not subject to achievement of positive NFE) on payment of central excise duty which is leviable on like goods manufactured and cleared by units other than EOUs (Ref : Sr. No. 3 of Notification No. 23/2003-CE). If such goods are manufactured & cleared by unit other than EOU and are fully exempt from duties of excise or are chargeable to 'Nil' rate of duty, the clearance of such goods by EOU into DTA, is allowed on payment of 30% of each of duties of customs leviable on similar goods, if imported. (Ref. Sr. No. 4 of Notification No. 23/2003-CE).
The DTA clearance of by-products and rejects on concessional rate of duty is not allowed to the EOUs, which have failed to achieve the positive NFE. In such cases, the EOUs are liable to pay full duty. Further, in case of these units, DTA clearance of finished goods is not allowed even on payment of full duty. As for waste/scrap/remnants, the same are allowed to be sold in DTA on payment of concessional rate of duty within overall limit of 50% of FOB value of exports. In case of sale of scrap/waste/remnants beyond this limit, the same is allowed on payment of full duty. As for DTA clearance of goods manufactured by the EOUs which are not excisable (e.g. cut flowers) the duty on inputs and consumables etc. procured/imported duty free under exemption notifications, which have gone into production of such non-excisable goods cleared into DTA, is to be recovered.
In addition to above, there is full exemption from payment of duty to the rags, trimmings and tailor cuttings arising in the course of manufacture of readymade garments falling within the Schedule to the Central Excise Tariff Act, 1985 and produced in EOUs. However this is subject to the condition that the percentage of waste material in the form of rags, trimmings and tailor cutting does not exceed the SION fixed in this regard or the percentage approved by the Board of Approval. (Sr. No. 11 of Notification No. 23/2003-CE, dated 31-3-2003).
Further under Sr. Nos. 12 to 16 of Notification No. 23/2003-CE, the waste of fish or crustaceans, mollusks or other aquatic invertebrates falling in chapter heading 05.01, castor oil cake manufactured from the indigenous castor oil seeds on indigenous plant and machinery falling under chapter heading 23.02, guar meal manufactured wholly from indigenous guar seeds falling under chapter heading 23.01 and yarn of jute and goods of jute, manufactured from wholly indigenous raw materials falling under chapter heading 53.07, 53.10, 5702.12, 5703.20, 58.01, 58.02, 58/06 or 6305.10 are fully exempt from payment of duty if manufactured by EOUs and brought to any other place in India. Further the goods falling under heading 52.02 of Central Excise Tariff are fully exempted if produced or manufactured by EOU and allowed to be sold in India.
In case of Gems and Jewellery EOUs, the units are allowed to sell upto 10% of FOB value of exports of the preceding year in DTA subject to achievement of positive NFE. In case of sale of plain gold jewellery, Plain Silver Jewellery, studded gold jewellery, unsuitable/broken cut and polished diamonds, rough diamonds, precious and semi precious stones or dead stock in Domestic Tariff Area, the units are allowed to pay concessional rate of duty as specified in the notification. (Reference: Sr. Nos. 8 to 10 of Notification No. 23/2003-CE, dated 31-3-2003).
In addition to the above, under Sr. Nos. 5 to 7 of notification No. 23/2003-CE, certain specified textile items are also allowed to pay concessional rate of duty in case of DTA sales of such items by EOUs.
The EOUs are allowed to remove the goods into DTA on an invoice. The invoice under Rule 17 of Central Excise Rules, 2002 is used both as a transport document and also as a document for determining the assessable value. EOUs can pay the duty by depositing the duty amount in the authorized bank or the duty can also be debited from the Personal Ledger Account if an account current is maintained.
EOU/ETHP/STP units are permitted to sell finished goods, which are freely importable under the Foreign Trade Policy, in DTA against payment of full duties provided they have achieved positive NFE. Further, following supplies of manufactured goods effected from EOU/EHTP/STP to DTA are counted for the purpose of fulfillment of positive NFE:—
(a) Supplies effected in terms of Chapter 8 of the Policy.
(b) Supplies made to bonded warehouse set up under the Policy or under section 65 of the Customs Act.
(c) Supplies against special entitlements of duty free goods.
(d) Supplies of goods and services to such organizations which are entitled for duty free import of such goods.
(e) Supply of services (by services unit) relating to exports paid for in free foreign exchange or for such services rendered in Indian Rupees which are otherwise considered having been paid for in free foreign exchange by RBI.
(f) Supplies of Information Technology Agreement (ITA-I) items and notified zero duty telecom and electronic items.
In respect of DTA sale under (a) to (f), prohibition or regulation under any law effecting import thereof in force at the time when such goods are imported, are applicable. The duty on such goods is exempted if there exists an exemption notification issued by Department of Revenue (Ministry of Finance) specifically providing exemption from payment of duty to such supplies in DTA. Otherwise full duty as leviable under proviso to section 3(1) of Central Excise Act, 1944 is payable on such supplies made in DTA.
Regards
Anantha krishna